Academic

Pack 'n Pay: American Airlines Ends Free Checked Baggage

By Dan Filler

American Airlines announced today that it will begin implementing a $15 charge for checked baggage on its flights.  I'm sure this will generate some fresh revenues for the airline (as would pay-per-sheet toilet paper), but it will also make the cabin an even less pleasant place.  Now we can safely assume that almost every passenger will carry both a roller bag and a second tote on board.  But not to worry; it can't be long before the airlines begin measuring these bags, and charging for oversized models.  (By the way, will customers be charged when the overhead racks fill and they are required to check bags at the plane's door?)

A la carte pricing of flights - from food, to seat location, to baggage - makes a smidgen of sense.  There are some customers willing to save $15 in exchange for giving up the right to checked bags.  But I fear that a more likely explanation for what is occuring is poor information flow.  Prospective customers buying tickets at Orbitz may not know the comparative costs of add-ons for the various airlines they're considering.  They probably purchase based solely on the listed airfare.  So airlines have every incentive to minimize that sticker price and instead introduce other charges at the airport - when customers have little choice but to pony up the cash.  Perhaps this is just good business practice.  The smart shoppers will always find the best value; those who haven't done extensive research pay the surcharges.  Sounds a lot like shopping for a car.  And we all know how satisfying an experience that is.

Full post as published by The Faculty Lounge on May 21, 2008 (boomark / email).